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Why Is Expeditors International (EXPD) Up 2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Expeditors International (EXPD - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Expeditors International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Earnings Beat at Expeditors in Q3

Expeditors' earnings of earnings of $1.12 per share surpassed the Zacks Consensus Estimate of 98 cents and also improved 21.7% on a year-over-year basis.

Adding to this optimism, the top line not only rose 18.8% year over year to $2,464.8 million but also surpassed the Zacks Consensus Estimate of $2,315.1 million. The uptick in airfreight revenues boosted results.  Due to the coronavirus-induced imbalance between scheduled capacity and demand, the company had to use charters to meet customer needs.

Other Details

In the quarter under review, volumes pertaining to airfreight tonnage and ocean container contracted 5% each on a year-over-year. Operating income jumped 22% to $252 million in the third quarter on the back of higher revenues.

During the September quarter, the company did not repurchase any share. The company exited the quarter with cash and cash equivalents of $1.46 billion compared with $1.23 million at the end of 2019.

Airfreight Services revenues soared 52.8% year over year to $1,093.55 million in the third quarter. Ocean Freight and Ocean Services revenues improved 4.7% to $612.86 million. Moreover, Customs Brokerage and Other Services revenues decreased 2% year over year to $758.39 million.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Expeditors International has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Expeditors International has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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